Knight Frank has released its London New Homes Report 2024, providing a comprehensive analysis of the capital’s new build residential market.
Key findings show:
1. Market Recovery: London house prices have returned to growth, rising 2% annually at the end of Q3 2024. Knight Frank forecasts a 2% growth in Greater London house prices for the year.
2. Supply Constraints: Housing delivery in London remains far below target, with new starts plunging to record lows. Annual delivery has dropped to 35,000 homes, down 10% from the previous year, against the London Plan’s target of 52,300 homes.
3. Demand Trends: London buyers are most attracted to new build homes for their lack of a seller chain, energy efficiency and financial incentives. There’s also a growing focus on amenities and green spaces.
4. Key Development Areas: The report highlights significant regeneration projects in areas such as North London (Barnsbury & Holloway), East London (Canary Wharf), South London (Southbank), and West London (White City).
5. Rental Market: Rents are expected to grow faster than house prices, with a forecast of 5.5% annual rental growth in Greater London for 2024, reducing to 3.5% in 2025.
6. Permitted Development: Recent relaxation of permitted development rights has led to a surge in applications for converting large commercial buildings into residential units, potentially boosting housing supply.
Anna Ward, associate in Knight Frank’s research team, says: “London’s housing market is showing renewed energy, with house prices growing 2% annually and demand for new builds rising. However, housing supply remains severely constrained, with new starts at record lows due to rising costs, labour shortages, and planning delays. As the population continues to grow, the focus must shift to innovative solutions like office-to-residential conversions and retrofitting to meet the city’s evolving housing needs.”
And Raul Cimesa, partner at Knight Frank and head of London New Homes, adds: “The London new homes market is showing encouraging signs of recovery. We’re seeing a surge in interest across various price points, particularly in regeneration hotspots like Canary Wharf and White City. The recent interest rate cut has been a catalyst, driving an uptick in viewings and reservations with buyers increasingly drawn to developments offering a mix of urban convenience and access to green spaces. Developers who can offer this blend of location, space, and lifestyle amenities are finding their properties in high demand.”
